ifip 8.2 panel on the service economy

IBM Global Business Consulting

© Copyright IBM Corporation 2008

Information Systems Enablingthe growth of the Service Economy

David Lipien,PMP IBM Senior Managing Consultant

IFIP 8.2 Working Conference on IT and Change in the Service Economy

Ted Rogers School of Management at Ryerson University

August 11, 2008 - Toronto, Canada


IBM Corporation

[email protected] | IFIP 8.2 Panel On the Service Economy 2

The largest labor force migration in human history is underway, driven by global communications, business and technology growth, urbanization and low-cost labor.

Nation % WW Labor % A % G % S

China 21.0 50 15 35

India 17.0 60 17 23

U.S. 4.8 3 27 70

Indonesia 3.9 45 16 39

Brazil 3.0 23 24 53

Russia 2.5 12 23 65

Japan 2.4 5 25 70

Nigeria 2.2 70 10 20

Bangladesh 2.2 63 11 26

Germany 1.4 3 33 64

Top Ten Nations by Labor Force Size (about 50% of world labor in just 10 nations)

A = Agriculture, G = Goods, S = Services

Data Source: IBM SSME Research Presentation, presented by Dr. Jim Spohrer – January 2007


IBM Corporation


Demographics and globalization are two key components fueling the services economy. Service oriented architectures and open standards are the major enablers.

08’ IBM CEO Study: technological advances are reshaping value chains, influencing products and services and changing how their companies interact with customers 1.

08’ McKinsey Survey: firms used Web 2.0 2 not just inside the enterprise to establish two-way communication with employees, but also outside to let customers and suppliers participate in the development of services to form external networks tapping widely dispersed knowledge.

IBM, like other enterprises, is transforming itself in response to fierce global competition, security threats, a plethora of regulatory requirements, cost pressures and demands for more flexibility and agility.

Component Business Modeling (CBM), Service Oriented Architecture (SOA) and Model Driven Architecture (MDA) play an important role in this transformation and the transformation of our largest clients 3.

1. Based on surveys of 1,130 CEO s, general managers and senior public sector and business leaders from around the world.

2. The McKinsey Quarterly conducted the survey in June 2008 and received responses from 1,988 executives from around the world. Web 2.0 Tools: Web services, Blogs, Peer-to-peer networking, Podcasts Social networking and Wikis.

3. To address flat growth one of IBM largest P&C Client built an easy, fast purchase system on the web that will allow the consumer to acquire (and purchase) an auto insurance quote from the internet in a self service way to drive growth.


IBM Corporation


The way we look at people, process and technology is changing significantly and the enterprise of the future is hungry for change.

People are the drivers of the business – they interact with reusable business services using the right information at the right time.

Outcome driven.

Empowered to make decisions and business case focused.

Global Citizens.

Processes need to be flexible, automated, reduce administrative time, adaptable and reusable to enable faster reaction to business indicators.

Project Management focused.

Globally available web enabled tools.

Technology must connect, enhance and deliver in-context information across diverse operating systems, applications and legacy systems through reusable services.

Knowledge sharing tools.

Based in frameworks and patterns.

Reusable software assets and artifacts.


IBM Corporation

This hunger for change can be best demonstrated with a real world client example with a growth problem in a services industry – major US P&C Insurer.

Challenge of Growth: By the end of 2006, growth had become the primary challenge.

- Revenue grew at less than 5% CAGR in the period from 2002 to 2006 and barely 2% from 2004 to 2006.

Solution Approach: Self service quote and buy insurance application built on agility.

- Built on the Microsoft .NET framework, Web 2.0 enabled solution.

- Heavily utilizing IBM Professional Services Industry and Technology consultants.

Results to Date: Very positive and building a strong foundation for expansion.

- Tripled monthly new business applications and purchase percentage meeting business case.

USLead

Design

India

Code

Unit Test

Plans & Micro Designs

Software Artifacts & Results

String Test

IBM One Network

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IBM Corporation


As IBM and many our of clients have discovered, the very challenging business climate, a shift in demographics, globalization and technology has created a skill gap.

Today, there is the challenge of finding SOA Skills. A recent Impact Conference survey showed:- Half have less than 25% of the necessary SOA skills required to meet long term goals and

- 80% of the respondents surveyed were increasing SOA skills in 2008.

In the US there are 1,200+ listings in the IBM Global Business Services and IBM Global Technology Services divisions.

Hot client jobs:- Process Flow Designers: investigates the explicit, declarative, service orchestration

(aggregation, composition) possibilities. It concentrates on the technical process flows that support given business processes.

- SOA Project Manager: an evolution of the classic project manager. The SOA PM not only needs to plan for much shorter delivery cycles, but must establish new acceptance models. The PM has to work with the service providers to establish the appropriate service-level agreements and resource usage.

“Over the next ten years, IBM intends to hire 50,000 university graduates worldwide, skilled in the field of SSME”

Nick Donofrio, Executive Vice President, Innovation and Technology